KUALA LUMPUR (Dec 1): Bintai Kinden Corporation Bhd has proposed to undertake a private placement of up to 281.54 million shares, or 30% of its issued share capital, to third-party investors who have yet to be identified.

The engineering services company said based on an indicative price of seven sen per placement share, the private placement is expected to raise RM19.71 million. 

The group is expected to utilise the majority of the proceeds to finance the group’s working capital.

Meanwhile, the Practice Note 17 (PN17) company highlighted that it was in the midst of formulating a regularisation plan to address its PN17 status and shared that the group’s other banking facilities have either been cancelled or suspended, thus putting the group’s cash flow under severe strain.

“Currently, the group is in the midst of restructuring and/or rescheduling its borrowings and has implemented a group-wide downsizing and pay cut on June 1, 2023 as part of its cost reduction measures. This has resulted in an exodus in the group’s workforce whereby the group’s staff headcount has reduced from 116 employees in May 2023 to 32 employees as at end of October 2023. 

“Moving forward, the group will face difficulties in retaining existing staff as well as attracting new staff to replace certain key job functions that have been left vacant by those who have left the group following the group-wide downsizing and pay cut. 

“In order to continue meeting its monthly commitments for loan instalment payments, staff salaries as well as other operating and administrative expenses, the group requires an urgent injection of working capital via the proceeds to be raised from the proposed private placement,” it explained. 

The private placement is expected to be completed by the first quarter of next year, the group said.

For the record, the group had previously issued a private placement in January this year, raising a total of RM5.99 million. 

Shares in Bintai Kinden closed 0.5 sen or 5.56% lower to 8.5 sen, giving it a market capitalisation of RM79.77 million. 

Year to date, the stock has fallen 15%.